TY - JOUR
T1 - Technology, Trade, and Growth: The Role of Education
AU - Prettner, Klaus
AU - Strulik, Holger
PY - 2016
Y1 - 2016
N2 - We generalize a trade model with firm-specific heterogeneity and R&D-based growth to allow for endogenous education and fertility. The framework is able to explain cross-country differences in living standards and trade intensities by the differential pace of human capital accumulation among industrialized countries. Consistent with the empirical evidence, scale matters for relative economic prosperity as long as countries are closed, whereas scale does not matter in a fully globalized world. The average human capital of a country, by contrast, influences its relative economic prosperity irrespective of trade-openness.
AB - We generalize a trade model with firm-specific heterogeneity and R&D-based growth to allow for endogenous education and fertility. The framework is able to explain cross-country differences in living standards and trade intensities by the differential pace of human capital accumulation among industrialized countries. Consistent with the empirical evidence, scale matters for relative economic prosperity as long as countries are closed, whereas scale does not matter in a fully globalized world. The average human capital of a country, by contrast, influences its relative economic prosperity irrespective of trade-openness.
UR - https://www.cambridge.org/core/journals/macroeconomic-dynamics/article/technology-trade-and-growth-the-role-of-education/98769CE5BD214D547242229F1B9F4AFD
U2 - 10.1017/S1365100514000856
DO - 10.1017/S1365100514000856
M3 - Journal article
SN - 1365-1005
VL - 20
SP - 1381
EP - 1394
JO - Macroeconomic Dynamics
JF - Macroeconomic Dynamics
ER -